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Published : Thu, Sep 13 2018 :12 PM.
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A bill of sale is a type of sales receipt often used when an individual is selling an item that carries a high value, such as a used car, boat, or aircraft. A bill of sale can document the sale of personal property, tools, animals such as livestock or pets, and household furnishings or appliances. However, this type of documentation is generally not used when selling low-cost items, providing services, or for real estate purchases. While the seller typically provides the document, both parties gain some protection from it: Buyers can retain a copy of the bill of sale as proof of purchase, payment, and ownership, and sellers can document the terms of the sale and the condition of the item. Both buyers and sellers may need a bill of sale for accounting, tax reporting, or insurance purposes.
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Seller and Buyer: It is common to include contact information for both seller and buyer, such as address and phone number, along with a driver’s license number. Buyers may want to check a seller’s driver’s license or picture ID before handing over funds and signing the bill of sale to ensure they are buying from the person listed on the receipt.
A Bill of Sale acts as a receipt for both parties. The seller can use it to prove that an item was sold to the purchaser "as-is", and the buyer can use it to prove that payment in full was given to the seller. It also provides a sale date to both parties, which can show when the responsibility of the item was transferred. Both the purchaser and the seller can use a Bill of Sale as evidence of the price paid for tax purposes.
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A bill of sale is a document that verifies your purchase, and therefore your ownership of, a valuable asset such as a car, a TV or other large item. Not only does the bill of sale prove you legally own the item, it may be used to determine how much sales tax you pay. It also releases the seller from liability and protects both buyer and seller from any disputes that may arise over the item in the future. Rules for bills of sale vary from state to state. For example, Michigan does not require a bill of sale when buying or selling a car.
Witness: Some states require a notarized bill of sale when an individual is selling a vehicle. Check with your local DMV to determine what documents and procedures you need to complete. Even if you don’t need a notary to witness your bill of sale, you may choose to have a third party sign the document to show that he or she observed the buyer and seller signatures.